August 13, 2007

Competing roles for transportation dollars

How North Carolina spends its highway funds is a topic of intense discussion. Urban areas generally claim they are being shortchanged because they have all the traffic and congestion. But rural areas counter that they need roads to achieve economic development. Who's right? N.C. State University economist Mike Walden weighs in.

"This is a case where actually both are right, and it reveals the multiple roles that we ask highway spending to take on," says Dr. Walden, a North Carolina Cooperative Extension specialist. "Some statistics do show that urban areas are getting much less highway spending per mile driven by their residents. And these same statistics do show that rural areas are getting a lot more money.

"But also rural areas can make the point that, in general, they lag in economic development, and studies show that improving transportation infrastructure can be a big tool to spur business investment," he adds. "So here you have got roles -- you've got two roles -- that the transportation budget is supposed to fulfill, and they are obviously competing.

"Now what are some solutions? Well, one solution would be to divide the state gas tax and highway spending into two explicit parts: One part would go only for projects in counties where the funds were raised so people were assured that that money was going back to their region or county. But the second part would be spent anywhere in the state and, obviously, could be used to spur economic development in particular regions," Walden continues.

"So this is an idea where we explicitly point out the two different roles that we ask highway spending to fulfill and allow taxpayers to see those roles enacted."